Posts Tagged ‘United States Court of Appeals for the Second Circuit’

Julian Simock on Kiobel, RICO and Litigating Corporate Abuse

September 11, 2012

Julian Simcock (JD Candidate, Stanford Law School; Harvard University – Harvard Kennedy School (HKS)) has posted “Recalibrating after Kiobel: Evaluating the Utility of the Racketeer Influenced and Corrupt Organizations Act in Litigating Corporate Abuse”, New York City Law Review, Vol 14, 2012 (forthcoming). The abstract reads: 

This analysis seeks to explore the un-examined question of whether RICO could one day become a useful surrogate for the Alien Tort Statute (ATS) in litigating international corporate abuses. Decades after the ATS had become a robust tool for bringing claims for international violations in U.S. courts, the Second Circuit recently ruled in Kiobel v. Royal Dutch Petroleum that corporations cannot be held liable for torts in violation of the law of nations under the ATS. Rulings by the D.C Circuit and the Seventh Circuit quickly breathed new life into the debate, and the circuit split is now destined for resolution by the Supreme Court. Although the final outcome is still unknown, Kiobel’s reverberations are already apparent. With corporations potentially immune from the reach of the ATS, the search has begun for vehicles by which to sustain momentum in litigating international corporate abuses.

The article is available on SSRN for download here.

 

 

 

Alan Scott Rau on “The Errors of Comity: Forum Non Conveniens Returns to the Second Circuit”

June 11, 2012

Alan Scott Rau (University of Texas at Austin School of Law; University of Texas – School of Law, The Center for Global Energy, International Arbitration, and Environmental Law) has posted “The Errors of Comity: Forum Non Conveniens Returns to the Second Circuit”, American Review of International Arbitration, Forthcoming August 2012/Energy Center Research Paper No. 12-04. Here’s the abstract:

What a federal court is expected to do when asked to enforce a foreign arbitral award — what constraints the Conventions impose on its normal course of adjudication — is of course a vast question. But there is one small piece of the puzzle that recurs frequently, and which has in particular been troublesome to the Second Circuit.: What remains of the inherent power of a common-law court to defer or dismiss litigation of a Convention case on the grounds that it constitutes an “inconvenient” forum?

A decade ago a federal district court in Monde Re, “relying on the doctrine of forum non conveniens,” dismissed a petition to confirm a foreign arbitral award, and the Second Circuit affirmed. The received wisdom ever since has been quite hostile — uniformly to the effect that the obligations imposed by the New York and Panama Conventions make any recourse to the doctrine inappropriate. Despite the fact that the Convention in art. III allows contracting states to continue to use their “rules of procedure” in recognizing or enforcing foreign awards, that is a category of very weak explanatory power: While litigants may have to take local courts as they find them, the one thing art. III cannot be intended to do, is to permit local courts to devise rules that compete with, or undermine, or put up obstacles to, the rules of decision under which the Convention expects them to assess the legitimacy of awards.

Now in Monde Re itself the respondent, the state of Ukraine, had not been a signatory to the contract nor did it participate in the arbitration: Its defense — “I was never a party to any agreement to arbitrate” — would indeed constitute an art. V ground for the refusal of recognition and enforcement. The inquiry then becomes, “just how do we go about answering the question?” — or more precisely, “just who is best placed to evaluate whether these ‘grounds’ are present? Or perhaps, “just who is to make the decision?” It is a familiar notion that the grounds for decision, and the identity of the appropriate decisionmaker, are likely to call for entirely distinct inquiries, and it seems plausible to say that the former may be so intertwined with the need to obtain foreign-source evidence, and with the need to assess foreign law, that it may become prudent to defer the decision to a foreign court.

But by contrast the Second Circuit’s latest venture into the area, in Figueiredo Ferraz, is astonishing: Here the court deferred the enforcement of a Peruvian award on the basis of the “public interest factors” called for in the usual forum non conveniens analysis — and these “factors” did not refer in any way to any supposed difficulties a U.S. court might face in establishing the identity of the “proper party.” Instead the “public interest” was entirely that of Peru, for Peruvian legislation imposed a limit on what a government agency was permitted to pay annually in satisfaction of a judgment against it. Apparently such “public factors” were closely congruent with considerations of international comity. But none of this even comes close to being an art. V ground for the refusal of recognition and enforcement, and in a Convention case the usual recourse to a court’s “discretion” must be foreclosed: While by its terms the Convention may allow a contracting state to enforce awards even where the canonical art. V grounds are present, it extends no leeway whatever to refuse to do so when they are not.

Whether on a motion to confirm a Convention award — or at an earlier stage on a motion to stay litigation or compel arbitration — a doctrine of forum non conveniens must in the structure of our law have only the most marginal presence. Anything more robust would be in considerable tension with the goals of the Convention to increase the currency of awards by limiting challenges and expediting enforcement. But although forum non must play a slender role of only intermittent interest, it has a role nonetheless, whenever a Convention defense is in play and the identity of the appropriate decisionmaker is in doubt. The trick is to preserve the classic virtues of prudence and restraint and economy of means in adjudication, while at the same time managing to respect the structure of the Convention, and being alert to the policies in support of the arbitral process that the Convention seeks to advance.

A pdf copy of the article is available for download via SSRN here.

SCOTUS grants cert. in ATS case: Kiobel v. Royal Dutch Petroleum

October 17, 2011

John Bellinger at Lawfare reports that the U.S. Supreme Court has granted certiorari in Kiobel v. Royal Dutch Petroleum. 

Briefly, on September 17, 2010, the United States Court of Appeals for the Second Circuit, in a 2-1 split decision,  ruled that the Alien Torts Statute (ATS) grants U.S. courts jurisdiction over alleged violations of international law by individuals only, not by corporations. Essentially, the majority opinion held that corporations cannot be sued under the ATS for violations of customary international law because “the concept of corporate liability . . . has not achieved universal recognition or acceptance of a norm in the relations of States with each other.”  (Slip op. at 49).

The two issue presented before the U.S. Supreme Court are:

(1) Whether the issue of corporate civil tort liability under the Alien Tort Statute, 28 U.S.C. § 1350, is a merits question or instead an issue of subject matter jurisdiction; and

(2) whether corporations are immune from tort liability for violations of the law of nations such as torture, extrajudicial executions or genocide may instead be sued in the same manner as any other private party defendant under the ATS for such egregious violations.

The Kiobel appeal is joined with Mohamad v. Rajoub which will address the issue:

Whether the Torture Victim Protection Act of 1991 permits actions against defendants that are not natural persons

SCOTUS Blog has full coverage, including briefs and documents here and here.

Murray et al., Exaggerated Rumours of the Death of an Alien Tort: Corporations, Human Rights and the Peculiar Case of Kiobel”

August 24, 2011
Corporate America Hallway

David Kinley and Odette Murray (University of Sydney – Faculty of Law) and Joe W. “Chip” Pitts III (Stanford Law School) have published “Exaggerated Rumours of the Death of an Alien Tort: Corporations, Human Rights and the Peculiar Case of Kiobel”, Melbourne Journal of International Law, Vol. 12, No. 1, pp. 57-94, 2011/Sydney Law School Research Paper No. 11/48.

The abstract reads:

Over the past 15 years or so, we have become accustomed to assuming that corporations are proper subjects of litigation for alleged infringements of the ‘law of nations’ under the Alien Tort Statute (‘ATS’). But, in a dramatic reversal of this line of reasoning, the United States Court of Appeals for the Second Circuit in Kiobel v Royal Dutch Petroleum 2010 (‘Kiobel’), has dismissed this assumption and concluded that corporations cannot be sued under the ATS. This article explores the Court’s reasoning and the ramifications of the decision, highlighting the ways in which the Kiobel judgment departs from both Supreme Court and Second Circuit precedent. The authors take to task the critical failure of the majority in Kiobel to distinguish between the requirements of legal responsibility at international law and that which is necessary to invoke ATS jurisdiction in the US District Courts. In the context of the maturing debates over the human rights responsibilities of corporations, the authors point to the political as well as legal policy implications of Kiobel and underscore the reasons why the case has already attracted such intense interest and will continue to excite attention as a US Supreme Court challenge looms.

The .pdf copy of the article is available from SSRN here.

* Readers should take note of the recent decision of the U.S. Court of Appeals for the District of Columbia in  John Doe VIII v. Exxon Mobil Corp.. U.S. Court of Appeals (D.C. Circuit, No. 09-7125, July 8, 2011)) which expressly rejected the Kiobel v. Royal Dutch Petroleum decision on the application of the ATS to corporate conduct.


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